I find the following rating of Washington state bonds quite interestings on the S&P website.
What follows is for academic interest in the study of interest rates and economic theory.
SAN FRANCISCO (Standard & Poor's) July 15, 2002--Standard & Poor's said today that it removed from CreditWatch and affirmed its double-'A'-plus rating on the State of Washington's outstanding $8.25 billion in general obligation debt based on the state's adoption of a 2002 Supplemental Budget, which balances the 2001-2003 biennial budget and revises revenue projections over February estimates.
In addition, Standard & Poor's assigned its double-'A'-plus rating to the state's $184.46 million in new general obligation debt, to be sold July 23. However, both the new and existing ratings were given a negative outlook based on the state's economy, which appears to be lagging behind the national economy to a greater extent that was thought earlier in the year.
"While the state's budget is now balanced, this reflects the use of one-time revenue and expenditure adjustments for 50% of the $1.5 billion budget gap," said credit analyst Gabriel Petek. "However, the diversity of the state's economy combined with a history of sound financial management gives Standard & Poor's comfort in confirming the double-'A'-plus rating," he added.
Standard & Poor's said that a rating downgrade could result if the state's economic recovery falters or is too weak to restore balance to the budget using recurring revenues rather than one-time adjustments.
The state's rating was originally placed on CreditWatch on March 19 because of the budget deficit, caused by lowered revenues due to the national and state economic slowdown. The new debt will be used for financing various capital projects throughout the state and for housing assistance, weatherization, and affordable housing project expenditures.